The e-commerce sector has hailed the launch of the Association for South African Payment Providers (ASAPP), a fintech body that aims to contribute to creating a progressive digital payments ecosystem in the country.
The newly-formed association aims to help ensure fair access to payment infrastructure, reduce the wholesale cost of digital payments, and enhance transparency and customer mobility in SA’s payment ecosystem for individuals and businesses.
Speaking to ITWeb on the side-lines of the launch yesterday, Alastair Tempest, CEO of E-commerce Forum South Africa, said the new body’s objectives will help resolve pain points experienced during online payment processing.
These include a lack of seamless technology integration with the merchant’s site, delayed payments, fraud risks and huge payment costs.
“I think this body is extremely important. SA's fintech and e-commerce sectors need to be represented. We still see money sitting in the banks for ages after a transfer has been made,” noted Tempest.
“Those challenges need to be addressed. E-commerce is about rapid payments, whether it's business-to-business or business-to-consumer. This is one of the big things that enable the e-commerce industry in the US, China and Japan to thrive.
“There is talk that this will never happen in Africa because payments are always delayed, but this is what we need to be fighting for – and if we can, Africa’s e-commerce will be much more successful.”
ASAPP’s founding members − Altron, Hello Group, iKhokha, Lesaka, Network International/Payfast by Network, Peach Payments, Shop2Shop and Yoco – say they bring a wealth of experience and a shared commitment to contribute to enhancing SA’s digital payments landscape.
According to Tempest, ASAPP will pave the way for engagements between the e-commerce sector, regulators, fintech players and the rest of the local payments ecosystem, to enable local online merchants to trade on the same playing field.
The implementation of new policies and robust infrastructure to deliver fast transaction speeds will be key to creating a frictionless online trading ecosystem, he explained.
Complying with regulatory requirements for digital payments needs an understanding of the legal landscape and for online merchants to maintain high security standards, he continued.
“What we need to do is sit down with the new association and discuss and exchange information. We must look at their focus areas and ours, and create a synergy. As the e-commerce body, we have an MOU [memorandum of understanding] with the South African Chamber of Commerce and we are planning to have one with Proudly SA. We need to create more good relations in the ecosystem and exchange information to advance e-commerce.”
President of ASAPP and Lesaka Technologies CEO Lincoln Mali told ITWeb that the success of the new association largely hinges on regulators stepping up their policies and frameworks to create a conducive environment for its objectives to be met.
“We cannot achieve any of our objectives without regulatory intervention. This requires regulatory and legal change. Hence, getting the South African Reserve Bank (SARB) on-board.
“We are going to achieve this through engagement with the SARB, looking at whether their priorities match our objectives. For example, regarding market access, SARB has said it wants to involve non-banks in the payments system, to be able to settle and clear payments without needing the banks. That is something we subscribe to.”
ASAPP envisions a future when unbanked South Africans are able to gain access to technologies that will allow them to transact, purchase and send payments to peers, without the involvement of a bank.
“Everything we do at the moment is all part of banking. For settlement, we need banking. We are saying there must be all forms of payments available outside the banking services for consumers and businesses to be able to use seamlessly.
“For instance, taxi drivers, plumbers, cleaners must be able to accept all payments, and consumers who are unbanked should be able to pay for these services seamlessly via digital means, outside the banking services,” said Mali.
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